Many homebuyers, especially first-time homebuyers, may confuse appraisers and home inspectors or use the words interchangeably, but they are different real estate professionals. We’re here to help you explore the differences, so you know which one is the right one to contact. So what’s the difference between appraisers & home inspectors?
What Are Their Different Responsibilities?
When looking at an appraiser vs home inspector, you have to differentiate what they do and how they help you in the home buying process.
Home appraisers are professionals who determine the value of a property. Some of the factors they consider include:
- Comparability: They compare the house you want to buy to other homes recently sold in the area with the same features and size.
- Features: They look at any feature that could increase the home’s value, like pools, sprinkler system, and landscaping. They also look at the condition of things like the foundation, exterior and interior walls, flooring, plumbing, HVAC system, and roofing.
- Structure: They look at the size of the house, the land it sits on, number of rooms and look for any leaks or cracks that could reduce the value of the home.
The majority of mortgage companies require an appraisal report to help determine the home’s estimated market value and determine how much money they can give you for the house. Appraisers are usually licensed professionals with no connections to the mortgage company. Appraisers gather information by visiting the home, online, or using a drive-by-appraisal.
They then analyze the data and create an appraisal report, which the mortgage company uses to determine if they will approve your loan or not. Lenders usually do not lend over 97% of the home appraised value, so if the appraisal is lower than the offer price on the house, you either pay the difference out-of-pocket, renegotiate, or walk away from the property.
However, if the appraisal is higher than the offer price, that automatically means you get more equity in the property.
Home Inspector Responsibilities
Home inspectors look at the house to determine its current condition and any issues that need fixing. Unlike appraisers, home inspectors conduct a more detailed inspection of the home and all the features.
They look at the same things that appraisers look at, but instead of valuing them, they determine their condition and if it needs fixing. Apart from the home’s structure, they also look at other things you might not see or think about upon entering the house, like lead paint exposure, radon, drainage, electrical wiring, and ventilation.
If you go with the inspector during this process, they will walk you through the process, tell you the professionals you need to contact, and what future problems you might encounter if you decide to buy the house. While it’s essential to hire a home inspector, it is not a must in the process as the lenders do not require the report.
Who Pays Them Home Inspectors Vs. Appraisers?
One notable difference between appraisers and home inspectors is who pays for them. Knowing this will help you how much honey you will spend in the whole home buying process.
Who Pays Appraisers?
If you’re building a home, the buyer typically pays for the appraisal along with all of the closing fees. Otherwise, you would not pay for the appraisal at closing.
If you’re not building, then you would not pay for the appraisal during the closing costs. The lender is the one who requests appraisal services, and the buyer is the one who will pay it, unless you have negotiated with the seller to pay for it as part of the buying process.
You can also purchase your own appraisal if you’re looking into refinancing or wanting to figure out how much equity is in your home.
Who Pays Home Inspectors?
Depending on the home inspector’s report and the house’s issues, you can decide to pay for the repairs, have the seller fix them before buying, or negotiate to split the payment with the seller. Unlike home appraisers, you are the one who looks for a home inspector. This is a big difference between appraisers vs. home inspectors.
Appraisers vs. Home Inspectors Education And Licensing
When comparing an appraiser vs home inspector, education and licensure are key things because you need to ensure that you hire licensed and the most skilled ones.
Appraisers Education and Licensing
The first step to becoming an appraiser is becoming an appraiser trainee, registered appraiser, or apprentice appraiser. The appraiser has to finish and pass 75 hours of basic appraisal education.
The education comprises three courses; 30 hours of basic appraisal principles, 30 hours of basic appraisal procedures, and 15 hours of Universal Standards of Professional Appraisal Practice.
The appraiser trainee must have an experienced appraiser supervise them and ensure they get in all the 75 hours of courses. Appraiser trainees don’t have to take or pass an exam to be recognized as a registered appraiser at a national level, but some states require that.
They should also look for an experienced appraiser who will help them gain experience before going to the next level.
After that, the appraiser trainee applies to become a licensed residential appraiser. They can appraise complex one to four-unit residential homes whose transactional value is below $250,000 in market value and non-complex one to four-unit residential houses with a value of below $1,000,000.
You have to finish 150 hours of education in four courses and gain at least 1,000 hours of experience in six or more months before going to the next level.
The next level is the certified residential appraiser. The appraiser is required to get in 200 hours of education, 1,00 hours of appraisal experience in no less than 12 months, and have an associate’s or bachelor’s degree from a recognized university or college.
The degree must be from a focused field, and the appraiser must have completed 30 credit hours in the university in specified topics. Under that level, the appraiser can appraise one to four residential units without complexity or transaction value limitations.
The final and uppermost level is the certified general appraiser, where the appraiser needs 300 hours of education and 3,000 hours of experience in no less than 18 months. 1,500 of those hours must be from non-residential appraisals.
They also need to have at least a bachelor’s degree in any field from a recognized university or college. At this level, the appraiser can appraise any property.
Home Inspectors Education and Licensing
The education and requirements of an appraiser vs home inspector are usually different, and it is easier to become a home inspector than an appraiser. While appraisers need to have licenses to get jobs, home inspectors don’t require one in many states.
The states that don’t require home inspector licenses are California, Montana, Wyoming, Colorado, New Mexico, Kansas, Nebraska, Missouri, Minnesota, Indiana, Michigan, Georgia, and Maine. First, home inspectors have to research and understand state regulations, after which they choose a school for their pre-licensing requirements where they take a pre-licensing course.
After completing the course, they need to take their home inspection licensing exam like the National Home Inspector Exam, and if they pass, they can apply for the exam. While not all states require a home inspection license, getting one helps inspectors feel confident about themselves and makes clients feel confined and safe working with them.
Inspectors usually work for a home inspection firm or alone, which is essential to consider when hiring one. You should also ensure that the home inspector does not run related businesses like renovations or remodels because that will influence their report.
How Much Do Appraisers vs. Home Inspectors Charge?
What’s the difference between appraisers & home inspectors in terms of cost? Since you will need both services to get the best house deal, you need to understand an appraiser vs home inspector’s charges.
How Much Do Appraisers Charge?
Home appraisers usually range between $450 and $500, but the average is usually $450. The charges typically depend on the mortgage company you are working with and the appraiser’s experience. Learn more about appraisal costs here.
How Much Do Home Inspectors Charge?
Home inspector fees usually range between $300 and $450, but the average is usually $280-$400. Like appraisers, the charges depend on how experienced the home inspector is. To learn more about home inspection costs, click here.
What Are The Similarities Of Appraisers vs. Home Inspectors?
One similarity between home inspectors and appraisers is that you have to pay them whether you buy the house or not. You can work with a different appraiser and home inspector, but you can have one person do both jobs, especially if you find one who works independently. Since the services come as a package, it could be lower than paying separately.
Find The Best Appraiser For Your Home Appraisal
After gathering information about an appraiser vs home inspector, the next step is researching the best and most qualified professionals. If you’re in Utah, ExcelAppraise is one of the best home appraisal companies in the area.
We will help you appraise your home when buying, selling, buying, looking for mortgage refinancing, applying for PMI removal, undergoing a divorce, estate planning, or tax assessment. We also appraise properties for realtors, and our services are for residential and commercial properties.
Our appraisers have completed and passed all educational requirements, attained all necessary experience, and are licensed.
For more information, to book our services, or get a free quote, contact us today on 1-801-882-2292.